One of the most controversial issues facing Boulder voters as the Nov. 3 election approaches is Ballot Question 301: “New Development Shall Pay Its Own Way.” While opponents of the issue criticize the citizens’ initiative for vague language, supporters argue every aspect of the wording is intentional to accommodate several possible strategies for execution. By law, City staff is unable to speculate or comment about the implications of the initiative if it passes, and while they have presented an initial work plan, they are delaying most of the necessary research to determine these implications until after the election.
The City is currently working with two different consulting firms to update the development-related impact fees and excise taxes, which is the City’s current attempt to ensure development pays its way. And Boulder charges the highest rates in the area according to a comparative analysis presented to City Council at the Oct. 13 study session. But what this current fee structure doesn’t address, but the initiative seeks to, is the full impact development has on City services, not just facilities.
“The key thing to keep in mind with this is that it doesn’t differ substantially in terms of methodology,” says Leonard May, a member of the planning board and one of the three City Council candidates who supports 301. “The issue is with the impact fees and other fees that we charge — there’s no doubt that they contribute to the City’s bottom line. That’s not the issue. The issue is whether they pay their full way or whether there is essentially a public subsidy because they don’t pay for all their own impacts.”
However, while the proponents say implementing the initiative would be easy, and critics say it is all but impossible, City staff has outlined a list of tasks they would need to accomplish if 301 passes. And at the Sept. 1 City Council meeting, Deputy City Attorney David Gehr explained transitional issues that might arise in order for the City government to come into compliance with the initiative. For example, the City would most likely stop accepting building permit applications, although already permitted projects would be allowed to continue development, until all the details are worked out.
Such details include developing general service standards for all City departments so that they can then calculate a proposed new development’s impact on said services. They would also have to calculate the potential direct and indirect revenue generated by new development, such as additional sales tax and property tax, in order to calculate where the budget falls short so they can charge developers the difference.
“That’s some complicated math that hopefully an economist or some type of expert can help us work through,” Gehr told City Council.
Carson Biser, president of TischlerBise, Inc., one of the consultant firms currently working with the City of Boulder to update the impact fee structure, explains several different methodologies that could be used to pay for additional service impacts that aren’t covered by the current structure, such as special assessment districts, road impact fees or development agreements where the developers agree to pay a certain amount into an operation fund for certain services over time. Although Bise has seen such agreements, he says they are “few and far between.” And these agreements aren’t part of a jurisdiction’s regulatory structure, he says.
Another option for the City to consider would be to conduct a full fiscal impact analysis, which looks at the financial impacts of land use and development regulation by analyzing the City’s tax supported funds, then projecting the potential revenue generated by both residential and commercial development. If the normal modes of generating revenue (i.e., sales tax, property tax, etc.) numbers come up short, then developers would have to pay the difference in one form or another. Such a study would take three to six months, Bise says.
“There are a number of ways to get at mitigating the impacts. One way is for the impacter to come up with the creative solution to mitigate it themselves and the other way is for the City do it, but have [the developer] pay for it,” May says. He describes Google’s private shuttle service for employees at its Palo Alto headquarters as one such example. “It’s a cost, somebody is going to pay it. It’s just a matter of whether the impacter is going to pay it or you and I pay it.”
Steve Pomerance, spokesperson for Livable Boulder, the citizens’ action group that gathered petition signatures to place initiative 301 on the ballot, says the calculations are easy — simply ask how much the City needs to serve a specific facility, and then charge the developer accordingly.
“They’re going to have to do some work, but it’s not impossible and it’s not even that hard,” Pomerance says, “like libraries for example. They generally use two standards — square feet or number of volumes. How hard is this? You go and ask them how many square feet and number of volumes and divide it by the number of people and there’s your standard. Everybody thinks this is complicated and it’s not.”
The City would also need to develop, draft and implement legislation, most likely in the form of City Council ordinances, to accomplish the requirements laid out by the initiative. This would require additional research to ensure the City is within federal and state law by charging development for these costs. For example, at the Sept. 1 meeting, Gehr also referred to regulatory takings, or a situation in which government regulation limits the use of private property to such an extent that the property’s value or utility diminishes.
Pomerance argues the initiative language prevents the City from implementing any policies that are illegal. “If they do what’s reasonable to achieve the extent allowed by federal and state law then you’d have a hell of a time challenging them,” he says.
But opponents of the initiative disagree. Andy Schultheiss, executive director of Open Boulder, a non-partisan grassroots organization seeking to make Boulder “open to new ideas, new people and new ways of living, working and playing in Boulder,” outlines several scenarios in which legal action against the City could be taken.
“They (the city and its consultants) will all have to make legally defensible calculations that specifically are a result of an individual development and to me, you can make up some numbers and they may even have some substance behind them, but development companies have good lawyers,” says Schultheiss.
The initiative would also allow the City to consider multiple developments at a time so as not to calculate the cost of development on City services on a project-by-project basis. However, Schultheiss argues that looking at the development of an area in aggregate, as the initiative suggests, is not feasible. “What if a building is LEED-certified, energy efficient and carefully designed to lessen impacts? Are they going to pay the same amount as a developer who did the opposite? I think that’s just ripe for a lawsuit as well.”
Schultheiss refers to the initiative as a “backdoor moratorium” on development, by threatening to drive development prices so high, and make the regulation so complicated that developers leave. “That’s just going to go on and on forever until the developers just give up and stop building in Boulder and I think that’s the goal.”
But Pomerance denies this. “The goal is to charge [developers] for what their impacts are,” he says. “If it turns out that people say it’s not worth building in Boulder… If it turns out that for development to pay its own way and not degrade City facilities and services it’s too expensive to build, then we know exactly where we are, which is that it is no longer economically worth it to the citizens in Boulder to have more development.”
He says large areas of development impacts not addressed by the current structure are affordable housing and traffic congestion. However, Boulder Housing Partners’ Board of Commissioners has also come out against initiative 301, stating the disruption and delays implementing the initiative could drive prices up, even if only in the short-term.
Schultheiss argues that although he understands where the sentiment behind 301 comes from, he, like many other opponents, doesn’t believe it’s the right tool to generate more revenue from development to pay for City services. In his estimation, the right approach is to elect City officials who can implement policy, rather than creating a charter amendment that leaves so many questions left unanswered.
“There’s an enormous amount of avoidance in this but the truth is, it’s really not that complicated,” Pomerance says. “They’re going to have to do the work, and when they’re done, we’ll have something that works in this city and we won’t be trashing the place. It’s pretty much that easy.”